August 31, 2006

It's Not Just Wal-Mart

Don Boudreaux posted an excerpt from a report on a study which found that the arrival of a Wal-Mart can benefit the overall economy of a community. Among the supportive evidence offered by commenters is a description of how the Safeway which had been the only grocery in his town improved their quality and service when faced with competition. Part of the store's focus has been at the high end, where it is easy to compete with the big box.

When Jewel, part of the national Albertson grocery chain, entered the Milwaukee market, the usual suspects raised the same sort of objections Wal-Mart generates, but in fact Jewel's arrival produced the same positive results. The little mom & pop groceries which serve a walk-in trade appear uneffected. The groceries driven out were the Kohls (a different corporation than the department stores; now strictly wholesale). Their most profitable stores had reportedly been the ones in the black community, like the one near my house where we shopped only in an emergency, having found, despite the dim lighting, mouldy bread, squishy fruit, and past-date dairy products. The black-owned Lena's grocery chain has acquired a couple of former Kohls locations. By focusing on a narrow selection they are able to be quite price-competitive on what they sell (we buy most of our meat there; once you note that it is never brine cut it is a much better deal). They have also acquired a fleet of mini-vans and provide free rides home with a $40 purchase, thus making them more of a threat to the corner stores than the big boys are. Hopefully they are doing well enough to expand into that Kohlspace down the street from us now that the discount mall that opened there has folded. I haven't tracked El Rey's success as closely, but their stores serving the south side's Hispanic community has clearly survived big bad Jewel's entry into the market.

Posted by triticale at August 31, 2006 11:16 AM | TrackBack
Post a comment

Remember personal info?